Shares of PayPal Holdings Inc
The results came amid an exciting earnings season. Here are some key analyst takeaways from the earnings release.
Truist Securities On PayPal
Analyst Andrew Jeffrey maintained a Buy rating, while raising the price target from $80 to $85.
"We believe the worst of branded share loss is behind the co, evidenced by mngmt's observation that 2Q23 branded vol was +6.5%, accelerating to 8% in July, w/an additional 2H23 pick-up anticipated," Jeffrey said in a note. "30% 2Q23 Braintree (BT) vol growth reflects PayPal's strong two-sided network value proposition," he added.
"We see lack of a CEO announcement as disappointing, but an apparent eComm recovery, strong FCF and bottoming fundamentals create attractive risk/reward," the analyst further wrote.
Canaccord Genuity Capital Markets On PayPal
Analyst Joseph Vafi reiterated a Buy rating, while cutting the price target from $160 to $110.
PayPal's second-quarter results were strong, with revenue at the high end of the guidance range, Vafi said. "Importantly, branded checkout volume growth accelerated in July to 8%, the highest monthly growth rate since the pandemic," he added.
Management also noted that ecommerce growth had accelerated to the mid-single-digit range, "a material change from flat when the year started," the analyst further stated.
Oppenheimer On PayPal
Analyst Dominick Gabriele reaffirmed an Outperform rating, while reducing the price target from $89 to $77.
"Although we're above consensus 2024FYE EPS, consensus margin expansion in both 2023/2024 is likely too high (1.40%/0.60% respectively)," Gabriele wrote in a note. "With transaction take rate pressure in 2Q23, and TPV mix shift moving forward, consensus 2024FYE take rate seems out of reach," he added.
"Our incremental cautious stance also relates to revenue growth ~matching processors while operating margin declining/stable," the analyst further said.
Susquehanna On PayPal
Analyst James Friedman reiterated a Neutral rating and price target of $78.
"We are open and optimistic about PYPL's many new initiatives coming to market," Friedman said. "For example, as 'unbranded' (Braintree) moves down market and overseas and adds services like Risk, Omni, Payouts and FX, margins should stabilize and eventually expand," he added.
"But we are still in the 'wait and see' stage as these penetrate," the analyst further mentioned.
Needham On PayPal
Analyst Mayank Tandon maintained a Hold rating on the stock.
PayPal reported solid quarterly results, its third-quarter outlook is strong, and the full-year guidance calls for around 20% growth, Tandon said in a note.
"While all this is encouraging, the mix shift to lower margin unbranded revenue is limiting the impacts from the cost initiatives, and we believe the unbranded processing has a narrower competitive moat which could make sustaining growth through these channels tough," he added.
PYPL Price Action: Shares of PayPal had declined by 11.58% to $64.72 at the time of publication Thursday.
